CIT v. HCL Comnet Systems & Services Ltd.

305 ITR 409Supreme Court of India2008#901 most cited

What is CIT v. HCL Comnet Systems & Services Ltd. authority for?

For computing book profits under Section 115JB, an Assessing Officer's power is limited to examining duly certified books and making adjustments only as per the Explanation. A provision for bad and doubtful debts, being a diminution in the value of an asset (receivable), does not constitute a 'provision for liability' under Clause (c) of the Explanation and therefore cannot be added back.

118

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2010 to 2026.

Also referred to as

CIT v. HCL Comnet Systems & Services Ltd. · 305 ITR 409 · Section 115JB · Section 115JA · book profit calculation · provision for bad and doubtful debts · MAT adjustments · Assessing Officer jurisdiction · provision for liability · Explanation to Section 115JB(2) · diminution in asset value

Also reported as

174 Taxmann 118

Sections most often in play

Section 115JBSection 143(3)Section 14ASection 36(1)(vii)Section 135Section 194HSection 40(a)(ia)Section 115JA
Read the full judgment

Issues it is cited on

section 226section 115jasection 211section 14a(1)section 135section 115jb(2)explanation to section 37book profitsperiod of holdingsection 114section 115jsection 80hhc

Judgments citing CIT v. HCL Comnet Systems & Services Ltd.

DCIT, Chennai vs. Megasoft Limited, Chennai

In the result, all the appeals of the Revenue stand dismissed

ITA 2560/CHNY/2014[2007-08]Status: DisposedITAT Chennai24 Aug 2016AY 2007-08

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita No.2560/Mds/2014 आयकर अपील सं./Ita Nos.1250, 1251 & 1252/Mds/2015 आयकर अपील सं./Ita No. 1416/Mds/2015 "नधा"रण वष"/Assessment Years: 2007-08, 2006-07, 2008-09, 2010-11 & 2011-12 The Deputy Commissioner Of M/S Megasoft Limited, Income Tax, Company Circle Iv(2), V. No.85, Kutchery Road, The Assistant Commissioner Of Mylapore, Chennai - 600 004. Income Tax, Corporate Circle 4(1), Chennai - 600 034. Pan : Aabcm 8933 A (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Dr. Milind Madhukar Bhusari, CITFor Respondent: Dr. C.P. Ramaswamy, Advocate
Section 10A

…sion for doubtful debt to the extent of `1.30 Crores. According to the Ld. counsel, the Assessing Officer failed to consider Explanation 1 to Section 115JB of the Act. Referring to the judgment of Supreme Court in CIT v. HCL Comnet Systems & Services Ltd. (305 ITR 409), the Ld.counsel submitted that the debt payable by the assessee is different from the debt receivable by the assessee. In this case, the debt is not payable by the assessee but, receivable by the assessee. Therefore, the provision for bad and doubtful debt was made to cover the probable diminution in the value of asset. Hence, the CIT(Appeals)…

Haldia Petrochemicals Limited, Kolkata vs. ITO, Ward - 12(4), Kolkata

In the result, the appeals of the assessee for A

ITA 2114/KOL/2009[2006-07]Status: DisposedITAT Kolkata29 Jul 2016AY 2006-07

Bench: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi

Section 115JSection 32

…out and accepted under section 143(1) as per the law prevalent at the relevant time as settled by the decision of the Hon’ble Calcutta High Court in the case of Balrampur Chini Mills [214 CTR 684(Cal.) and the Hon’ble Supreme Court in the case of HCL Conmet [305 ITR 409 (SC)]. He submitted that when the refund was granted to the assessee vide intimation issued under section 143(1) on 31.01.2008, retrospective amendments made by the Finance Act, 2008 & 2009 were not in the Statute and the said refund thus was granted in accordance with law as prevalent at the relevant time. He contended that the refund so granted…

ACIT Cir 4(2), Mumbai vs. J.B Mangharam Foods P.Ltd, Mumbai

In the result, appeal of the assessee is hereby allowed but that of the Revenue is hereby dismissed

ITA 1456/MUM/2014[2004-05]Status: DisposedITAT Mumbai29 Jun 2016AY 2004-05

Bench: Shri G.S. Pannu & Shri Sanjay Gargassessment Year: 2004-05 M/S. J.B. Mangharam Foods Acit Cir 4(2), Pvt. Ltd., Mumbai - 400020 D/1, 502 Krishna Kaveri C.H.S, Vs. Yamuna Nagar, Andheri – West, Mumbai – 400 053 Pan: Aaacj1657R (Appellant) (Respondent) Assessment Year: 2004-05 Acit Cir 4(2), M/S. J.B. Mangharam Foods Room No.642, 6Th Floor, Pvt. Ltd., Aayakar Bhavan, D/1, 502 Krishna Kaveri C.H.S, Vs. M.K. Road, Yamuna Nagar, Mumbai – 400020 Andheri, Mumbai – 400 053 Pan: Aaacj1657R (Appellant) (Respondent)

For Appellant: Shri Dilip S. Damle, A.RFor Respondent: Shri Prakash Patnade, D.R
Section 115JSection 143(1)Section 143(3)Section 147Section 271(1)(c)

…loss account prepared under Parts II and III of Schedule VI to the Companies Act, 1956 only to the extent that is permissible in the Explanation noted above. Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273 (SC) and CIT v. HCL Comnet Systems & Services Ltd. [2008] 305 ITR 409 (SC). Clause ( c) of Explanation (1) deals with "the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities". 15. In response to the notice for re-opening of the assessment, the assessee, in the course of its objections pointed out that the view of the Assessing Officer was consistent with the l…

The Commissioner of Income Tax (Central) vs. Sri Harish Kumar Harwani

ITTA/67/2011HC Telangana15 Jun 2016

Bench: RAMESH RANGANATHAN,M.SATYANARAYANA MURTHY

The West Bengal Power Development Corpn. Ltd., Kolkata vs. ACIT, Circle - 5, Kolkata

In the result, both the appeals of the assessee are treated as allowed for statistical purposes

ITA 834/KOL/2010[2006-07]Status: DisposedITAT Kolkata28 Apr 2016AY 2006-07

Bench: Shri P.M. Jagtap & Shri N.V. Vasudevan

…Account. But the facts remain that the assessee has actually received Rs.4,42,54,992/- and the remaining amount is not considered as recoverable by the Railway Authority. b) The Supreme Court in the case of CIT vs. HCL Comnet System & Services Limited [2008J 305 ITR 409 had held that bad & doubtful debts should be viewed as a diminution in the value of an asset, rather than as provision towards an 'Unascertained liability'. Such a provision is not a provision for liability because even if the debt is not recovered, no liability can be fastened on the assessee. c) The Supreme Court has also pointed out that wher…

Lawkim Ltd ( Now Merged With Godrej & Boyce Mfg. Co. Ltd), Mumbai vs. ITO WD 10(2)(1), Mumbai

The appeal is dismissed

ITA 5092/MUM/2010[2002-03]Status: DisposedITAT Mumbai22 Apr 2016AY 2002-03
For Appellant: Ms. Sonali GodboleFor Respondent: Shri M.Murli
Section 115JSection 143(1)Section 143(3)Section 148Section 14ASection 254(1)

…he order passed by the Tribunal is illegal and requires to be set aside. In that context, he also relied on the Judgment of the Apex Court in the case of Vijaya Bank v. CIT [2010)3231TR 166/190 Taxman 257 and CIT v. HCL Comnet Systems and Services Ltd. [200B) 305 ITR 409/174 Taxman 11B. After referring to items (a) to (f) as provided in the Explanation it was held that even doubtful debts can be added back to the net profit if Item (c) stands attracted. Item (c) deals with amounts set aside as provisions made for meeting the liabilities, other than ascertained liabilities, The assessee's case, would; therefore, f…

M/S. Digital Radio (Delhi) Broadcasting Ltd., New Delhi vs. ACIT, New Delhi

In the result the ground No

ITA 3063/DEL/2012[2008-09]Status: DisposedITAT Delhi07 Mar 2016AY 2008-09

Bench: Shri A. T. Varkey & Shri Prashant Maharishi

For Appellant: Sh.Sanjeev Sapra, CA & Mohit Sapra, CAFor Respondent: Sh.Susan
Section 115Section 115JSection 143(3)Section 234B

…a case where a similar issue had arisen and this judgment is reported as CIT v. Eicher Ltd. [2006J 287ITR J 70 (Delhi). The controversy was eventually resolved by the Supreme Court in the judgment reported as CIT v. HCL Comnet Systems and Services Ltd. [2008J 305 ITR 409 (SC). This judgment was rendered on September 23, 2008. It was observed as under (page 413) : "For the purposes of section 115JA, the Assessing Officer can increase the net profit determined as per the profit and loss account prepared as per Parts II and III of Schedule VI to the Companies Act only to the extent permissible under the Explanation…

The Commissioner of income Tax-II vs. M/s.Ideal Industrial Explosives Ltd

ITTA/100/2010HC Telangana01 Mar 2016

Bench: RAMESH RANGANATHAN,M.SATYANARAYANA MURTHY

A.C.I.T., Cir-II, Kolkata vs. M/S. Philips Electronics India Ltd., Kolkata

In the result, both the appeals of the assessee as well as the revenue are partly allowed

ITA 1928/KOL/2008[1999-2000]Status: DisposedITAT Kolkata03 Feb 2016AY 1999-2000

Bench: : Shri M. Balaganesh

For Appellant: Shri K.R Vasudevan, Advocate, ld.ARFor Respondent: Shri S. Srivastava, CIT/ ld.DR
Section 115JSection 143(3)Section 147

…for utilization against debts proven to be bad and written off during the relevant previous year.” We find that the decision relied upon by the Learned AR rendered by the Hon’ble Apex Court in the case of CIT vs HCL Comnet Systems & Services Ltd reported in 305 ITR 409 (SC) does not hold good in view of the retrospective amendment in the statute. For the sake of convenience, the relevant provision in clause (g) in the Explanation to section 115JA of the Act introduced in the statute vide Finance (No.2) Act 2009 with retrospective effect from 1.4.1998 is reproduced below:- ITA Nos. 1928 & 1815/Kol/2008-C-AM 6 M…

Asstt. CIT - Ltu, Mumbai vs. Reliance Industries Ltd., Mumbai

In the result, the appeal filed by the Revenue is dismissed

ITA 554/MUM/2014[1999-2000]Status: DisposedITAT Mumbai22 Oct 2015AY 1999-2000

Bench: Shri N.K. Billaiya & Shri Amarjit Singhआयकर अपील सं/ I.Ta No. 554/Mum/2014 ("नधा"रण वष" / Assessment Year:1999-2000 बनाम/ The Acit, M/S. Reliance Industries Ltd. Large Tax Payer Unit, Maker Chamber Iv, 3Rd Floor, Vs. Centre-1, 29Th Floor, 222, Nariman Point, World Trade Centre, Mumbai-400 021 Cuffe Parade, Mumbai-400 005 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacr 5055K (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Appellant By: Shri Sanjeev Kashyap ""यथ" क" ओर से/Respondent By: Shri Vijay Mehta सुनवाई क" तार"ख / Date Of Hearing :27.10.2015 घोषणा क" तार"ख /Date Of Pronouncement :27.10.2015 आदेश / O R D E R Per N.K. Billaiya, Am: This Appeal By The Revenue Is Preferred Against The Order Of The Ld. Cit(A)-24, Mumbai Dated 23.10.2013 Pertaining To Assessment Year 1999-2000. 2. The Sole Grievance Of The Revenue Is That The Ld. Cit(A) Erred In Deleting The Penalty Of Rs. 2,41,50,112/- Levied U/S. 271(1)(C) Of The Act.

For Appellant: Shri Sanjeev KashyapFor Respondent: Shri Vijay Mehta
Section 115JSection 143(3)Section 147Section 271(1)(c)

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ , मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER आयकर अपील सं/ I.TA No. 554/Mum/2014 ("नधा"रण वष" / Assessment Year:1999-2000 बनाम/ The ACIT, M/s. Reliance Industries Ltd. Large Tax payer Unit, Maker Chamber IV, 3rd Floor, Vs. Centre-1, 29th floor, 222, Nariman Point, World Trade Centre, Mumbai-400 021 Cuffe Parade, Mumbai-400 005 "थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAACR 5055K (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Appellant by: Shri Sanjeev Kashyap ""…

DCIT Cen Cir 18 & 19, Mumbai vs. Viraj Profiles Ltd, Mumbai

ITA 4439/MUM/2013[2008-09]Status: DisposedITAT Mumbai21 Oct 2015AY 2008-09

Bench: Shri Joginder Singh & Shri Ramit Kocharassessment Year: - 2008-09 Dcit,Central Circle-18 & 19 V. Viraj Profiles Limited Mumbai 10,Imperial Chamber,Wilson Road, Ballard Estate,Mumbai- 400 038 Pan/Gir No. Aabcv1740N Appellant Respondent

Section 10BSection 115JSection 14ASection 80G

…, 1962 amounting to Rs.73,07,018/- cannot be increased for the purpose of arriving at the book profit. The assessee company relied upon the following judgments : a) Apollo Tyres Limited v. CIT 255 ITR 273(SC) b) CIT v. HCL Connect Systems and Services Limited 305 ITR 409 (SC) c) ACIT v. Spray Engineering devices Limited (2012) 53 SOT 70 (Chd. Trib.) Page 5 of 58 Viraj Profiles Limited Assessment year: - 2008-09 5. The CIT(A) allowed the appeal of the assessee company by holding that as observed in Apollo Tyres Limited v. CIT (supra) by Apex court that where Profit and Loss Account has been prepared in accorda…

B & B Infratech Ltd., Bangalore vs. ITO, Bangalore

In the result, the appeal of the assessee is dismissed

ITA 726/BANG/2014[2005-06]Status: DisposedITAT Bangalore07 Oct 2015AY 2005-06

Bench: Shri Vijay Pal Rao & Shri Jason P Boazm/S.B & B Infotech Ltd., No.17, 4Th Floor, Shah Sultan Apartment, Ali Asker Road, Bangalore-560 052. … Appellant Pan:Aaacr6295D Vs. Income-Tax Officer, Ward 12(1), Bangalore. … Respondent

For Appellant: Shri T.Srinivasa, CAFor Respondent: Shri G.Ramesha, JCIT(DR)
Section 10(38)Section 115Section 115JSection 2(24)

…15JB. We find that the CIT(A) has rejected the claim of the assessee by following the judgment of the Hon’ble Supreme Court in the case of Apollo Tyres (supra) as well as the Hon’ble Bombay High Court in the case of CIT vs. HCL Comnet Systems & Services Ltd. (305 ITR 409). Accordingly, in the facts and circumstances of the case as well as above discussion, we do not find any error or illegality in the impugned order of the CIT(A). M/s. B & B Infotech Ltd. Page 9 of 9 8. In the result, the appeal of the assessee is dismissed. Pronounced in the open court on 07th October, 2015. sd/- sd/- (Jason P Boaz) JUDICIAL…

DCIT vs. M/S Syndicate Bank

In the result, the revenue’s appeal is dismissed

ITA 1700/BANG/2013[1990-91]Status: DisposedITAT Bangalore30 Jun 2015AY 1990-91

Bench: Smt. P. Madhavi Devi & Shri Abraham P George

For Appellant: Shri Farhat Hussain Qureshi, CIT(DR)For Respondent: Smt. Lalitha Rameswaran
Section 115J

…the CIT(A) stating that the same cannot be added back to the book profit, as there is no provision in the explanation requiring such addition. The assessee relied upon the judgment of the Hon’ble Apex Court in the case of HCL Comnet Systems and Services Ltd. (305 ITR 409). It was further contended that without prejudice to the above contention, the amount of provision is reduced from the amount of advances in the balance sheet and accordingly, it amounts to actual write off. For this proposition, the assessee relied upon the judgment of the Hon’ble Karnataka High Court in the case of CIT vs. Yokogawa India Ltd. (…

The Commissioner of Income Tax vs. M/S United Breweies Ltd

Appeal is disposed of accordingly

ITA/476/2009HC Karnataka05 Jun 2015

Bench: ARAVIND KUMAR,MOHAN M. SHANTANAGOUDAR

Section 115JSection 260

…? iii) Whether the amendment by Finance Act of 2009 with retrospective effect from 1.4.2001 by insertion of Explanation to Clause (g) to sub- Section (2) of Section 115JB of the Act, the judgment of the Apex Court in CIT Vs. HCL Comment Systems - 305 ITR 409, would not be applicable to the current assessment year 2004- 05 and the additions made by the - 4 - Assessing Officer in computing profits under Section 115JB of the Act would be correct? 3. Learned counsel appearing on behalf of the Revenue submitted that…

The Commissioner of Income Tax vs. M/S United Breweires Ltd

Appeal is disposed of accordingly

ITA/474/2009HC Karnataka05 Jun 2015

Bench: ARAVIND KUMAR,MOHAN M. SHANTANAGOUDAR

Section 115JSection 260

…? iii) Whether the amendment by Finance Act of 2009 with retrospective effect from 1.4.2001 by insertion of Explanation to Clause (g) to sub- Section (2) of Section 115JB of the Act, the judgment of the Apex Court in CIT Vs. HCL Comment Systems - 305 ITR 409, would not be applicable - 4 - to the current assessment year 2004- 05 and the additions made by the Assessing Officer in computing profits under Section 115JB of the Act would be correct? 3. Learned counsel appearing on behalf of the Revenue submitted that…

OBC vs. Commr. of Income Tax-1 & Anr

The appeal is allowed to the aforesaid extent

ITA - 20 / 1999HC Delhi14 Feb 2013
For Appellant: Mr Rajat Navet, AdvocateFor Respondent: Mr Sanjeev Sabharwal, Sr. Standing Counsel with Mr Puneet
Section 115Section 115JSection 260A

…gly. 4. In so far as question No.3 is concerned, the learned counsel for the appellant/ assessee submitted that it was covered by the decision of the Supreme Court in the case of Commissioner of Income Tax vs. HCL Comnet Systems and Services Ltd.: (2008) 305 ITR 409 (SC). We find that this submission of the learned counsel for the appellant is well founded particularly in respect of the year in question, that is, assessment year 1989-90. Accordingly, question No.3 is decided in favour of the assessee/ appellant and against the revenue. 2013:DHC:791-DB ITA 20/1999 Page 5 of 5 5. In…

CIT vs. Dcm Shriram Consolidated Ltd

The appeal is dismissed

ITA - 162 / 2012HC Delhi16 Mar 2012
Section 115JSection 14ASection 271(1)Section 271(1)(c)

…009. In the present case, the assessee had filed the return on income on 29.11.2006, which was revised on 31.3.2008. These are before the retrospective amendment in 2009. The assessee had relied on CIT v. HCL Comnet System and Services Ltd. (2008) 305 ITR 409 (SC) and submitted that no adjustment was required to be made for provision for bad and doubtful debts under clause (c) of the Explanation to Section 115JB. In these circumstances, we feel the Tribunal was justified in accepting and holding that the case is covered by Explanation 1 Clause (B) to Section 271(1) and had correctly dismis…

C.I.T vs. Ilpea Paramount (P) Ltd

The appeal stands disposed of accordingly

ITA/1178/2008HC Delhi18 Feb 2010
For Appellant: Ms P. L. Bansal with Ms Anshul SharmaFor Respondent: Ms Poonam Ahuja with Ms Mahima Agrawal
Section 115J

…ion contained in Section 115JA (2). By virtue of the said amendment, the amount or amounts set aside as provision for diminution in the value of any asset, is specifically mentioned. The Supreme Court in the case of CIT v. HCL Comnet Systems & Services: 305 ITR 409 held that provision for doubtful debts and doubtful advances did not fall within clause (c) of the said Explanation inasmuch as they amounted to provision in respect of diminution in the value of asset. 5. Now, with the introduction of the said amendment with retrospective effect from 01.04.1998, the provision for doubtful debts and t…